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OECD Environment Policy Papers

Designed for a wide readership, the OECD Environment Policy Papers distil many of today’s environment-related policy issues based on a wide range of OECD work. In the form of country case studies or thematic reviews across countries, the Papers highlight practical implementation experience. They are available in either English or French, with a summary in the other language when possible.

The Lake Taupo Nitrogen Market in New Zealand

A Review for Policy Makers

Lake Taupo is New Zealand’s largest lake, and a national icon. Its pristine waters attract visitors from round the world for a multitude of water-based recreation and sight-seeing activities. It is also important to New Zealand’s indigenous peoples.
In the late 1990s, scientific investigations by Environment Waikato (now the Waikato Regional Council), the regional authority responsible for environmental management in the Lake Taupo catchment, revealed that water quality in Lake Taupo was gradually declining. The research identified that nitrogen emissions were entering the lake from both natural processes and human activities, such as pastoral farming, urban runoff and wastewater (see Table 1). The total amount of nitrogen entering the lake was estimated at 1 360 tonnes annually. Of the 556 tonnes of manageable (i.e. human-induced) emissions, 510 tonnes were from pastoral farming.
Lake Taupo is contained within a collapsed caldera formed from one of the world’s largest eruptions, which took place 26 000 years ago. The now dormant volcano has left a legacy of ejected pumice and ash over much of New Zealand’s North Island and in particular in the catchment of the lake. This underlying layer of pumice makes the soil structure in the lake’s catchment extremely permeable and allows the unrestricted movement of both water and contaminants into the water tables draining into the lake.
Reducing contaminant inflows into the lake therefore needs to address the challenging issue of diffuse groundwater movements, which are largely unseen, and difficult to measure and predict. In some parts of the catchment, it can take more than 100 years for
run-off nitrogen to reach the lake (Vant, 2008).